The document summarizes a webinar on cost recovery basics. It discusses trends in cost recovery like more firms charging for online research costs. It covers budgeting costs and expected recovery. Electronic resource management tools help track usage and costs. Vendor tools assist with invoices and reports to track recovery against expenses. Regular reporting is important to monitor progress and exceptions. Communication with firm leaders is necessary to discuss recovery efforts.

1. Cost Recovery: The
Basics
A NPCI Webinar
February 12,
2009

2. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Today’s Speaker
Nina Platt
Principal Consultant
Nina Platt Consulting, Inc.

3. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Agenda
• Trends in Cost Recovery
• Budget
• Electronic Resource Management (ERM) Tools
• Disbursement Management
• Tracking Progress
• Communicating to Firm Leaders

4. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery
Movement towards not charging clients
vs.
Firm decision to continue charging

5. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Current Trends in Cost Recovery
AmLaw 2008 Survey
Recovery of online research costs increasing

6. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Current Trends in Cost Recovery
AmLaw 2008 Survey
3% of firms do not recover online costs

7. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
ABA Survey
% of Lawyers Who Don't Know How Their Firm Recovers Online Research Expenses
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
Solo 2-9 lawyers 10-49 lawyers 50-99 lawyers 100+ lawyers
Size of firm
39.7%
35%
21.4%
5.2%
2.1%

8. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
Expert Interviews
• No significant change in the near term
• Movement to not charge for online
services over time (10-20 years)

9. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research
• What contributes to the devaluing of
information?
– Lawyers aren’t taught to value research in law
school
– Lawyers want to be seen as experts who
have the answer
– A whole lot of waffling on the decision to
charge clients

10. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research
• What contributes to the devaluing of
information?
– Law firms don’t communicate openly with
clients about the value
– Clients have no trust in how the research is
being invoiced
– Clients won’t pay for services they don’t value
and invoices they don’t trust

11. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research• How can lawyer behavior be changed?
– Discussions with leadership – team with
group leaders
– Creation of transparent pricing policies
– Individual discussions with lawyers
– Presentations at practice group and team
meetings
– Lawyers providing message to clients

12. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research• How can client behavior be changed?
– Partners having the value discussions with
their clients
– Engagement letters that include transparent
research pricing policies

13. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget
• Face the responsibility w/o authority dilemma
• Budget your projected recovery against expense
to create the % of costs you hope to recover
• Depending on individual firm needs and vendor
bill groups, this budget may be split out by office,
practice group, etc.
• Set up accounts for each service where you plan
to recover costs

14. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget Example
GL for use in paying expense and another for
dispersing costs

15. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget Example
Percentage expected to recover

16. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget
• Set up two accounts
• The two accounts should be related to be able to
report on the recovery against cost
• Work with your accounting department may
have alternative ways of setting this up
depending on software and firm processes,
policies, and procedures

17. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget
• Work with Pro Bono to budget use of
research services
– Handled differently at each firm
– ProBono team may have their own budget
– Lexis vs. Westlaw

18. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – The Players
• Lookup Precision (Advanced Productivity
Software - US) This is not a West product.
• OneLog (Info Technology Supply, LTD – UK)
• Research Monitor (Priory Solutions – UK)
• Cost Recovery Manager (LexisNexis – US)
• Research Agent (sold to nQueue and taken off
the market)

19. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – Market
Penetration
• Survey of NLJ 250 with 100 firms responding
regarding the use of cost recovery tools
– 37 out of 100 firms have purchased the software
– 51 out of 100 firms plan to purchase in the near future
– If other NLJ 250 firms follow suit, 88% of that
population of law firms will be using this type of
software.

20. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools - Market
Distribution

21. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – The
Features and Functionality
• Site tracking
• Client/matter validation
• User id and password management
• Auto-population of user ids and passwords
• License management
• Reports
– Usage reports
– Cost recovery reports

22. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – Past Issues
• Difficult to set up
• Limited reporting
• Desktop plugins

23. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – Use in Practice
Functionality Implemented
0
5
10
15
20
25
30
35
40
Cost Recovery Site Tracking Password
management
License
management
Access Control Other
NumberofFirms

24. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Disbursement Management –
Vendor Tools
• West Quickview +
• Lexis Power Invoice
• PACER
• Dialog
• Others?

25. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Resources
• Westlaw Cost Recovery Solutions
• Lexis
– Lexis Power Invoice
– Library Relations Article
– LexisNexis Cost Recovery Manager

26. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Disbursement Management -
Vendor Tools
• Use of macros
• Uploading files to Accounting
• Cost recovery vendor solutions – e.g.,
Equitrac Online Services Module
• Providing backup
– Power Invoice – Enhanced report
– Quickview + - Target options

27. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Tracking Progress – Reports,
Reports and more Reports
• Internal library reports
– Maintain payment history in library system or
spreadsheets
– Report on how payments were broken out
from month to month (e.g., out of contract vs.
in contract)
– Report predicted recovery based on billable
vs. non-billable in usage reports

28. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Tracking Progress – Reports,
Reports and more Reports
• Internal accounting reports
– Reports for each unit (office, group, etc) and resource
being tracked - monthly
– Clients who are not charged or where research has
been discounted - quarterly
– Write-offs and non-billable charges in spreadsheet
format with clients, lawyers and practice groups
included in report – quarterly
– Exceptions report - monthly

29. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Tracking Progress –
Reports,
Reports and more Reports
• Vendor reports
– Quickview + and PowerInvoice reports
– Outside of contract details – monthly,
quarterly and annually – insist on spreadsheet
format
• Use to determine what resources to add to
contract
• Do not add outside contract content that can be
passed on to client (e.g., briefs)

30. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Communicating Recovery to
Firm Leaders
• Don’t be surprised
• Call leaders or accounting to discuss issues the
reports unearth
• Call group heads to discuss non-billables or
exceptions
• Treat write-offs with care

31. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Conclusion
• Cost recovery is here to stay for now
• If beliefs don’t change, we will continue to
struggle in recovering costs
• If we do change beliefs, we will be
contributing to the firm’s bottom line

32. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Questions? Need Help?
Contact Us
• Nina Platt, Owner, Principal Consultant
• nplatt@ninaplatt.com
• Carrie Long, Research Analyst
• clong@ninaplatt.com
• Emily Harder, Office Manager
• eharder@ninaplatt.com

33. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Contact Us for More
Information
• Nina Platt Consulting, Inc. (NPCI)
nplatt@ninaplatt.com
Call us: 612-235-7485
Visit us on the web: www.ninaplatt.com
Read our blogs:
http://strategiclibrarian.com
http://lawfirmintranet.com
http://electronicresourcereview.wordpress.com